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Food Movers: The Pallet Puzzle

Food Movers: The Pallet Puzzle

by | Jan 8, 2016 | Food Movers, Issue 1, Stories

One hundred years ago, on any dock, you could find longshoremen with sore muscles and calloused hands. Many of them would have spent days unloading each parcel by hand from the hull of a ship. Think “On the Waterfront,” but in color.

With the introduction of the pallet in the early 20th century, and with its wider use after World War II, what would have taken hours or even days with break bulk shipping — where each item is individually unloaded by hand — took a fraction of the time, allowing more goods to be moved more efficiently.

Pallets are platforms, moveable beds of sorts, for just about anything you’d want to ship. Key to their design is the ability of a forklift to pick up the pallet and whatever is sleeping on top of it and put it onto a train, truck, ship or airplane, or move it around a warehouse.

Today, more than 450 million pallets are manufactured each year. In the United States, 2 billion pallets pulse through the channels of the national supply chain — just like platelets through the human bloodstream — carrying vital cargo, often with little recognition of the role they play globally.

Pallets are so integral to the supply chain that they are subject to scrutiny in labs such as one at Virginia Tech, where researchers use stress machines and extreme conditions to test durability.

John Clarke spent 11 years at the Pallet Lab and now serves on its advisory board. He is also technical director at Nelson Company — a manufacturer and supplier of pallets. When it comes to materials, Clarke explains that while some industries favor plastic, steel or cardboard pallets, wooden pallets still dominate.

Ninety to 95 percent of U.S. pallets are made of wood, but even though wood offers affordability and reliability, the porous material risks bringing more than just cargo to its destination. Mold, bacteria and pests can quickly contaminate an already perilous food supply chain. To protect cargo, wood pallets must be sterilized by being heated to 133 degrees Fahrenheit.

“There aren’t many things as old as the pallet that are still made out of the same material as they were originally,” Clarke remarks. “That’s because wood is a very balanced material.” It’s stiff yet strong, cheap yet durable.

Although the 48-by-40-inch pallet is known as the “grocery pallet” for its common use in the food industry and beyond, there is no universal pallet size. Even grocery pallet dimensions are standardized only in the United States. Of the billions of pallets used in the world, there are thousands of sizes, materials and designs.

Some companies don’t own pallets at all. They rent them, creating “pools” of pallets. PECO and CHEP are two major pallet rental companies that appeared on the U.S. shipping logistics scene in the 1990s. As retail chains like Walmart and Costco gained more clout, they began mandating that products from manufacturers arrive on pallets instead of by clamp truck or in smaller loads. PECO and CHEP offered rental pallet services that would save manufacturers that had never used pallets the expense of buying, repairing and retrieving their own pallets.

Although it makes sense for some companies to own their own pallets and use them multiple times, Clarke says that many pallets are never returned to their owners. “You might have a custom pallet, but because of the weight and fuel costs, it’s just not economical to have it returned for ten dollars when you could replace it for five.”

As soon as a company finds a pallet strategy that works, changes in fuel or lumber costs can force another shift in the pallet puzzle.

In high-volume supply chains, all of this fuss over design, calculation and recalculation at the margin matters — especially for time-sensitive, perishable commodities like food. In 2010, Costco decided it would only accept block pallets, with forklift openings on all four sides instead of only two, in the case of skids. This eliminated the need to rotate the pallets if the side without openings was facing the forklift. If Costco unloads millions of pallets a year and saves just two seconds per pallet not having to rotate it, they will have saved hundreds of hours per year.

Pallets remain useful even after their days in the transportation system end. They might pile up outside a grocery store or end up at a special recycling or mulch grinding facility. Thanks to Pinterest, they might get upcycled into a photo frame or coffee table. Useful again, but this time, in full view.

Stringer pallets (above) have two opening points for the forks of a forklift, while a block pallet (top) has four, one for each side. While stringer pallets are less expensive, a block pallet saves time because a forklift or pallet jack doesn’t have to rotate the pallet in order to lift it. Click each image to enlarge.

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PALLET JACK

another name for a hand-driven forklift that moves pallets; not unlike a dolly.

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Food Movers: Chasing Maine Lobsters

Food Movers: Chasing Maine Lobsters

by | Jan 8, 2016 | Food Movers, Issue 1, Stories

It is 4:30 this morning, not a streak of light on the horizon in the eastern sky as the first full-throated growls of marine diesels come to life and begin their ghostly procession out into the inky pre-dawn blackness. Their halogen lights cast an eerie loom over their shimmering wakes.

After a long winter, the waters off the Maine coast have warmed to the point that lobsters have begun to crawl toward shore seeking protective shelters. There, they split their shells apart and struggle out of their protective armor, growing to a larger size in the process. Once their new shells have hardened within a few weeks, they are ravenously hungry. Millions of them scavenge along the bottoms of Maine’s intricate geography of bays, reaches, coves and creeks, waving their antennae to pick up scents that lead them to food, which lobstermen are only too happy to provide.

In 2014, Maine lobstermen harvested more than 124 million pounds of lobster worth close to half a billion dollars from Maine’s 5,000 miles of saltwater coastline. It takes the hands of thousands of workers on ships and shores to keep that supply chain moving.

Aboard the lobster boats departing the harbor, a lobsterman’s helper, called a sternman, is busy spearing salted herring from bait totes and stuffing this reeking repast into knitted bait bags. The captain rounds up, heads into the tide and comes alongside the first of the 200 to 300 lobster buoys he will visit today, all painted with his special colors. The captain gaffs the line with a boat hook and takes a wrap or two around the shivs of his hydraulic hauler, which catches the line and spins it into a pile at his feet.

Once the trap comes up over the rail, the sternman takes over. He or she — and there are many sternwomen and an increasing number of female captains — opens the top of the trap and pulls out lobsters and sundry other marine creatures that have crawled or wriggled into the wire enclosure looking for a free meal. The other creatures will go back overboard along with juvenile lobsters that have not reached the minimum or maximum size range that lobstermen are allowed to harvest. The sternman also checks for any eggs carried on a female lobster tail. Egg-bearing females, too, go back into the deep to release their eggs into swirling currents to keep the cycle of life — and Maine’s prodigious lobster economy — going.

Once back at the dock, the day’s catch is swung onto scales and sorted into crates, soon to be loaded into trucks en route to tens of thousands of restaurants, cruise ships and lobster shacks. Clearly, one of America’s few successfully managed fisheries is providing benefits to fishermen and foodies alike.

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Food Movers: Paper or Plastic?

Food Movers: Paper or Plastic?

by | Jan 8, 2016 | Food Movers, Issue 1, Stories

There was a time in our country’s history when farm-to-table wasn’t a trend, it was a necessity — especially when it came to dairy consumption.

If a family wanted milk, that milk came straight from the family’s cow and had to be consumed or turned into butter or cheese on milking day. Otherwise, it would spoil.

As farms and cities got bigger and fewer people kept their own cows, delivering fresh dairy became the milkman’s job. But the new process was far from perfect: Hand-delivered bottles were heavy and needed to be returned and sterilized, and without refrigeration, milk would still go bad within a day. Another problem: Glass jugs break.

Legend holds that the inventor of the paper milk carton we know today dropped a glass jug one morning, sending milk and glass everywhere. In his frustration, John Van Wormer patented a paper milk carton that could be shipped flat and assembled as needed at the dairy. (Until this point, dairies used G.W. Maxwell’s earlier paper milk carton, which did not fold flat.)

Van Wormer’s early Pure-Pak milk cartons, patented in 1915, were made of paperboard and sealed with wax, which prevented the milk from saturating the paperboard. The gable-top closure helped maintain freshness during transport while eliminating the need for a cap. And unlike glass bottles, milk cartons were lightweight and disposable: They could travel farther and didn’t need to come back.

JOHN R. VAN WORMER

Although G.W. Maxwell gets credit for creating the gable-topped milk carton, toy factory owner John Van Wormer invented a carton that could fold flat, a revolutionary efficiency in the milk chain.

Patent drawing for milk container that could fold flat, invented by John R. Van Wormer.

While people had a hard time letting go of their beloved glass bottles, the coated carton slowly gained popularity, and as that transition began taking hold, so did refrigeration. By the late 1940s, electric refrigerators were in most American homes, small family-owned dairies were consolidating and the milkman was securing his Rockwellian role in the lives of American families and neighborhoods that soon became nostalgia.

While neither was necessarily dependent on the other, the milk carton, owes some of its success to advances in cold chain technology — a series of refrigerated tanks, trucks (“reefers”) — and storage units that ensure dairy and other perishables like meat and produce make it from the farm to the grocery store without spoiling.

Today, the value of cold chain markets that support perishable food distribution globally is estimated at around $250 billion. And while many countries lag in their cold chain facility development, the United States annually moves some three billion gallons of chilled milk through a cold chain so efficient that customers can buy refrigerated milk at nearly every gas station and corner store in the country.

As other countries expand their own cold chains, the U.S. cold chain industry stands to profit from rapid growth. According to the Global Cold Chain Alliance, refrigerated warehouse capacity around the world increased by 20 percent from 2012 to 2014, and three of the top five refrigerated warehouse operators are U.S. companies. But most of that milk is no longer being moved in Van Wormer’s carton: The milk carton may have solved the problem of breaking glass, but plastic jugs have overcome some shortcomings of cartons: They are less likely to leak and easier to re-seal.

According to Glen Harrington, director of manufacturing for the Borden Dairy Company, milk manufacturers were beginning to make their own gallon and half-gallon plastic jugs by the 1970s. When produced on a large scale, Harrington says, it’s more cost effective for dairy companies to make cartons in-house than it is to buy them.

Paperboard milk and cream cartons are still in use, but these days, they’re lined with polyethylene, a plastic used for food-safe packaging. In many countries outside the U.S., milk is sold unrefrigerated in shelf-stable cartons, like the ones used stateside for soups and broths. The milk is usually pasteurized at a higher temperature to extend shelf life. The downsides to this type of shelf-stable milk, according to Harrington, are that it typically costs more and doesn’t taste as good.

“We’ve got a good system,” says Harrington. “Why would we spend more to make it taste worse if we could just move it around fresh?”

PLASTIC MILK JUG

The design of plastic milk bottles evolved quickly in the mid-1960s, when the handled jug as we now know it was invented. The design not only saved dairies money, it encouraged customers to buy a gallon of milk at a time, a large amount compared to the smaller quantities sold outside the U.S.

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The City that Feeds Mexico

The City that Feeds Mexico

by | Jan 4, 2016 | Feature, Issue 1, Stories

The traffic jam to enter the world’s largest food market begins around 3 a.m. Trucks of all sizes stream in, heavy with oranges from Veracruz or chiles from Chihuahua, manned by drowsy drivers who left their hometowns the day before to make the trip.

Imported cargo arrives via shorter daily runs from the neighboring international airport, and still other lorries cross several countries via the Pan-American Highway to sell their goods at Mexico City’s Central de Abasto.

At 327 hectares, this is the world’s largest market. Each day, more than 2,000 trailers, 1,500 semitrucks and 57,000 other vehicles provide 30,000 tons of produce to 9,500 stands. The market closes from 6 p.m. to 10 p.m. daily to remove the 1,300 tons of waste produced daily. The distribution network connects to more than 1,500 points of sale around Mexico, including public neighborhood markets, street tianguis (roving markets), 380 establishments associated with 15 chain stores, and other kinds of commercial centers.

Open 365 days a year, this mega-market welcomes over 350,000 visitors daily. It formally employs 70,000 people and informally many more, including over 12,000 cartilleros — delivery men with dollies — each day. The market handles more than 30,000 tons of food daily, representing approximately 80 percent of all the food consumed in the metropolitan area and about 30 percent of the food consumed in the country.

Feeding a city of 21 million inhabitants is no easy task, which is why this market has its own zip code, an independent governing body and even its own 700-man police force, which comes in handy considering more than $9 billion changes hands annually, mostly in cash. This makes Central de Abasto one of the largest economic centers of operations in the country, second only to the Mexican Stock Exchange.

Designed by architect Abraham Zabludovsky, Central opened its doors in 1982 in Ixtapalapa, southeast of the city center. The project grew from necessity: The former wholesale market, La Merced, had overwhelmed the centro histórico with traffic and lacked the necessary infrastructure to deal with the growing demands of the city. Of the market’s eight major sectors, Central’s fruit and vegetable area is the largest. Forty interwoven aisles stretch 140 acres, with 64 interior loading docks. All in all, that’s the length of 105 football fields, each piled high with produce. Most aisles sell mayoreo, wholesale quantities of 5 kilos or more, but several aisles provide menudeo, smaller quantities for the general public.

Hangar-style sections outside boast even cheaper prices. The subasta (auction) area, closed to the general public, hosts the first step in the chain of sale as middlemen negotiate prices for full trucks of produce directly with providers. Giant arched metal roofs top the open-air flower and vegetable area, where growers sell a variety of fresh goods to other vendors or directly to the public in a morning frenzy. Both areas are picked clean of merchandise by 8 a.m.

Enormous plastic bags of processed cereals and snacks can be found in the grocery and supplies section.
A 50 kilogram (110 pound) sack of corn costs costs between 14 and 24 cents in the outdoor flowers and vegetables pavilion. Skilful workers wielding sharp knives quickly clean the ears, allowing customers the option of buying kernels by the kilo.
In corridors I-J, vendors sell retail to the public in small quantities. This service was not available 10 years ago, meaning a customer who wanted to make guacamole would have to walk several football fields to gather all the ingredients.
Towers of huacales, inexpensive wooden crates used to carry fruits and vegetables, are repaired and resold in the Envases Vacíos (Empty Crates) area.
Piles of fresh octopus from the Yucatecan coast await a buyer in the fish and seafood area.
Oceánides sells salmon from Chile, fresh shrimp and mackerel from the Gulf of Mexico, octopus from the Caribbean, shark from Chiapas and farm-raised shrimp from several Mexican states.
The fruit and vegetable section is arranged as a woven tapestry, with five main hallways and eight commercial corridors connected by a series of raised pedestrian bridges that allow lorries to pass underneath. Cars park on rooftop decks, and the metal-roofed bodegas feature loading docks to the back and storefronts along the interior hallways to serve clients.
Poblano peppers from the Mexican state of Zacatecas await unloading. They will be packed into wooden crates and sold from the storefront, but a sign posted in the loading dock gives shoppers the option of buying directly from the truck. Here, one pound of poblanos costs about 31 cents.
Ignacio Romero and his two brothers have been selling Mexican oranges for more than 20 years from this stand, located at M113. Orange prices vary wildly throughout the year, swinging from 26 cents a pound in the summer to as low as 7 cents a pound in the winter, the high season for citrus.
Long morning shadows stretch from the lorries stacked high with onions, carrots, tomatillo and nopales (cactus paddles) as they back into the loading docks of the fruit and vegetable section.

The flow of goods throughout the market and to the points of distribution beyond its walls relies on the 12,000 cartilleros who rush through the corridors daily. Anyone with an ID and $1.20 can rent a dolly, but efficient and reliable cartilleros build a client base and make more money than beginners. It’s tough work, hauling up to half a ton of food in a single trip, navigating the jam-packed aisles during the busiest hours of 4 a.m. to 6 a.m. The elevated bridges connecting the corridor of bodegas to the hallways that lead to the outside parking lots provide a special challenge. Workers run quickly to gain momentum for the steep summit. They pause on top for a rest, then begin an equally difficult descent, with no brakes and a heavy load. A coded language of whistles fills the air and helps the cartilleros communicate with each other. “I’m on your left!” sounds different than “Move over, I’m coming through!”

Carlos Hernandez Reyna runs one of the larger companies that rents dollies to the 11,000 cartilleros at Mexico City’s Central de Abasto. His company rents out their entire fleet of 1,600 diablitos (little devils, the Spanish word for dolly) every single day, at $1.20 a piece. In an attempt to stop the annual loss of about 250 carts, his company is piloting a program in 2016 to install GPS tracking devices that will notify central command when a diablito crosses the market boundaries.
Eduardo Lopez Garcia works as a cartillero for two months at a time, then spends five months with his family in Chiapas. His busiest hours in the market are between 4 and 6 a.m.
Jesús Adonai, 18, has worked as a cartillero in the market since he was 12. He makes around $32 dollars a day during the week and $70 a day on the weekends. Mexico’s minimum wage is less than $4 a day. He stays at the market later than most, until about 9 p.m., as the commute home can take up to three hours if he leaves during the evening rush.
Ulysses Cruz Juárez won’t share his age or his brother’s name. He has worked as a cartillero for the past five years.
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Panama’s Big Bet on Big Ships

Panama’s Big Bet on Big Ships

by | Jan 4, 2016 | Feature, Issue 1, Stories

A century after the Panama Canal opened, Panama is opening a second set of locks this year that will welcome some of the world’s largest ships. This globe-changing expansion has U.S. farmers celebrating and port officials scrambling, but what does it mean for your plate?

In 2006, the Panama Canal had a problem.

Researchers predicted that by 2012 the canal would be maxed out. The 48-mile-long series of locks, an industrial miracle nearly forgotten by most of the people who benefit from it, would either have to turn ships away or raise prices to decrease demand. Panama’s President Martín Torrijos proposed an expansion of the canal, and in 2007 it began. That’s where our story begins, sort of.

America’s demands for growth — and for fresh food from the other hemisphere — shaped the canal as much as the canal has shaped Americans. Teddy Roosevelt’s brash international ambitions brought the canal into life, which in turn encouraged a century of accelerated consumption and a need to expand the domestic infrastructure to support it. These networks and consumption patterns underlie what foods we see in our supermarkets and how much they cost.

This year, the canal expansion will finally open, but most customers won’t notice anything different in their grocery cart. Why? Because when it’s working, infrastructure is invisible. Water, electricity and food flow in and out of our homes, but we don’t often consider how the links of the supply chain rely on each other. What happens when one of those links doubles in size?

CONNECTING THE OCEANS

Around the time gold was discovered in California, Frenchman Ferdinand de Lesseps secured permission to build a canal from the Khedive of Egypt in 1854. Construction on what became the Suez Canal began in 1859 and lasted just over 10 years. On the heels of completing the project, Lesseps began to eye Panama.

It took more than a decade, but by 1881 Lesseps had raised funds to build a sea-level canal. He underestimated the time and funds needed to complete the project, but even more daunting were the increasing deaths of his workers who fell ill and died faster than he could replace them. Still not known to transmit disease, mosquitoes were rampantly spreading yellow fever and malaria. By 1884, more than 200 men were dying every month.

Eight years after work began, all the money, more than 1.2 billion French francs, was gone. The project continued on life support until a suitable buyer was found. The asking price: $109 million U.S. dollars. But France was in a bind. They’d sunk hundreds of millions into their failed canal attempt and were still losing cash and workers as they attempted to slow the deterioration of machinery and excavation. The price tag left them with few options for buyers. The United States was an ideal prospect but had leverage — investing in a second canal route that had been found in Nicaragua. When the U.S. put in the lowball offer of $40 million, France had to take it.

The U.S. formally began its canal effort in 1904. By then, officials knew that mosquitoes were the root cause of many illnesses and had access to some preventive medicines. With a more stable workforce, the man running the project, John Frank Stevens, could solve the other major problem: how to build a canal that didn’t require removing millions of tons of dirt. Instead of a sea-level canal, he petitioned for a lock system on two sides of a man-made lake. Each lock would fill with water and empty itself to raise or lower a vessel.

Engineers built Gatun Lake, an artificial body of water 85 feet above sea level, and constructed the three locks on each side to manage the water level as ships passed through the main cut. In 1914, a thousand ships would navigate the canal locks. Nearly a century later, over 14,700 ships traversed the canal per year. Now, during the high season, it is not uncommon for vessels to wait 10 days before transiting the canal. It can cost shippers as much as $50,000 per day to sit idle, stymied by a complex bidding system for a slot in the canal.

The new locks, opening this year, are wider and run parallel to the current locks. The locks allow for ships that are 51 percent wider and 24 percent longer, which translates to 177 percent more containers per ship. Currently the project is $1 billion over budget, with estimates placing the total expansion cost at about $7 billion, about 20 percent of Panama’s. Though the canal expansion has only just been completed, Panama is considering a second expansion to build a fourth set of locks. Estimates put that project in the range of $15 to $20 billion.

The impact of this current expansion can only be imagined. About 55 percent of U.S. agricultural products are shipped through the Panama Canal. After the expansion, up to 80 percent of those products are expected to be shipped through that waterway. More grain passes through the canal than any other item or good. It’s difficult to calculate just how much the new canal will influence food prices, in part because the cost of fuel makes up half of a ship’s operating costs and bigger ships require more fuel to move. Whatever the outcome with regard to prices, it is likely that consumers will enjoy a wider variety of food ingredients as greater capacity will enable a more diverse food supply.

But the increased capacity may not be fully utilized until the global economy gets back on its feet. In 2015, shippers began seeing the impact of erratic movements in world currencies and the lagging economies of developing countries. This slowdown in global economic growth caused large shipping companies such as Maersk to cut back on plans for building new container ships. Stockpiles of empty containers sitting at ports without food to ship also signaled a dampening of hopes for full utilization of the canal expansion.

A wider channel and second set of locks that can accommodate post-Panamax ships now run parallel to the existing Panama Canal. These are the Miraflores locks, the closest to the Pacific. Image by Mike Kelley.

The Panama Canal took more than two decades to complete, including nine years to dig out the 9-mile-long Culebra Cut, which crosses Panama’s continental divide.

Skipping the Line

In 2006, a British oil tanker paid $220,000 to jump ahead of 83 other ships.

BIGGER AND BETTER

The new locks allow for ships that are 51 percent wider and 24 percent longer. This translates to 177 percent more containers per ship.

AN INTERSTATE HIGHWAY SYSTEM IS BORN

Forty years after the Panama Canal was completed, another globe-changing link in the shipping infrastructure came to life: The U.S. Interstate System.

After the Great Depression, the Works Progress Administration spent $4 billion (nearly $68 billion today) building and improving roads from coast to coast. With asphalt below the tires, the trucking industry started to take root, and by 1956, President Dwight D. Eisenhower authorized the interstate highway project that now encompasses 47,856 miles of road. Since the 1960s, the number of 18-wheelers has increased from fewer than than 1 million to more than 3 million, and the number of registered vehicles from 74 million to more than 255 million now.

After the highway system opened, intermodal shipping expanded quickly, but we were still missing one key piece, which would neatly link how we moved freight across both land and sea: the shipping container.

Average daily long-haul traffic on the national highway system in the U.S.

THE TWENTY-FOOT EQUIVALENT UNIT

At the same time as Eisenhower signed the Federal-Aid Highway Act, a shipping entrepreneur saw the possibilities of combining trucks with ships. Malcolm McLean, the founder of a small trucking company in North Carolina, sent the first modern cargo ship out to sea. He had converted two World War II tankers to carry removable containers. In the mid-1950s, he created the first container ship, Ideal-X, which transported trailers stacked above and below decks. Eventually, he built the Sea-Land Company and created shipping containers that were loaded on and off ships and transported to and from ports on trucks.

The large containers McLean developed are called TEUs — twenty-foot equivalent units — after the containers’ measurements. TEUs can move far greater quantities of goods than moving cargo one piece at a time into a ship’s hold, a long-used method known as break bulk. Today, there are more than 20 million active TEUs, and 90 percent of the things you purchase, including food, have spent time in a shipping container. According to Rose George, author of “Ninety Percent of Everything,” many of the largest container ships have the capacity to transport one banana for every person in Europe.

The modern intermodal system — moving containers from ships to trucks and back again — brought us more food at less cost. But it also resulted during the last century in unintended consequences, such as once-diverse agricultural regions shifting toward monoculture and commodity farming.

Once the full intermodal system opened up, the American diet, though more diverse because of an increased variety of food being transported, started to become standardized. The food sold in a grocery store in one part of the country looked a lot like the food sold in every other part of the country, but few people realized that infrastructure was what was shaping their diet.

Malcom McLean started a trucking company in 1935 and sold his stake in it twenty years later for $6 million, which funded his shipping company.

BIGGER BOATS, BIGGER PORTS

As more containers came into circulation, an interesting trend began to appear. Instead of building more ships, companies were building larger ships. For the companies, this meant significant cost savings. For the canals and ports, it was one never-ending (and expensive) nightmare.

Without much regard for existing infrastructure, ships have continued to balloon in size, and if they can’t fit through one canal or port, they are then routed to another port that can accommodate them, creating a fairly tidy demonstration of supply and demand.

This competition has led to intense spending across the world to accommodate ever-growing cargo ships. Ports are dredging land under water to create deeper channels to the docks. They are buying larger cranes and investing in automated technologies, including driverless vehicles called AGVs (Automated Guided Vehicles) and automated straddle carriers that can move containers around a terminal. Some ports, like the one in Portland, Oregon, are struggling to stay profitable because they can’t keep up with the growth of the ships.

Likewise for canals, there’s a very real urgency to update because they feel the pressure of competition too. Though it’s convenient, a ship doesn’t have to take the Panama Canal. Those coming from Asia to the United States can go through the Suez Canal, which completed its own expansion in 2015, adding a second shipping lane and deepening the existing one to allow for increased traffic and larger ships.

The Suez Canal isn’t the only other option for a shipping company. Melting ice has led to the development of arctic shipping lanes, and all eyes have been on Nicaragua, where a second Pacific-Atlantic canal is in the works. A slump in the Chinese economy has slowed the development of the canal, spearheaded by Chinese billionaire Wang Jing, but if the project can regain momentum, it will represent one of the largest earthmoving projects in history, employing 50,000 people. For context, the Panama Canal is 48 miles long, 15 miles of which is Gatun Lake. If the Nicaraguan Canal is completed it will be 170 miles long, with 66 miles on Nicaragua Lake.

When Panama saw its capacity ceiling approaching and ships widening, authorities made the call to add a third, wider set of locks. Almost immediately, ports, especially along the Eastern seaboard and Gulf Coast, began planning the improvements they’d have to make to attract more traffic.

The Port of New Orleans spent nearly $40 million to expand container handling capabilities, according to Director of External Affairs Matt Gresham. As reefer technology has improved, so has the demand for storage of these refrigerated containers. The Port of New Orleans spent $7.9 million to build a container racking system that can store 600 refrigerated containers, many holding imported bananas or poultry ready for export.

The Port of Miami is also hustling to attract the big ships. Last year, the port completed a dredging project that deepened the port by 50 feet, which allows them to service ships up to 22 containers wide. With this kind of volume, the Miami port is poised to become the primary entry point for products from South America, which would then be loaded onto trucks and distributed across the country.

These expansions are well-grounded. The Panama Canal expansion is going to unlock a huge amount of volume with roughly the same number of ships.

But the canal expansion and port renovations are still not enough for ships like Maersk’s Triple-E class and several Mediterranean Shipping Company vessels, which are among the largest container ships in the world. In 2014, the China Shipping Container Lines launched the CSCL, a container ship with a capacity of more than 19,000 containers. These newer, larger ships can load more containers, travel faster, and provide greater fuel efficiency. Bigger ships mean bigger capacity, and it’s easier to build a bigger ship than to dredge a port or expand a canal.

Farmers in the U.S. have also been pushing for port renovations and canal expansions because they know those changes to the supply chain infrastructure will mean more buyers for their goods. In 2011 China moved ahead of Canada as the largest importer of U.S. agricultural products. During 2012–2013, the U.S. provided almost a quarter of all agricultural imports to China. A significant percentage of those imported agricultural products are grains. The canal expansion is of particular interest to companies facilitating the shipment of those grains from the Midwest, where many of them are grown. And it appears that most developing countries will be net food importers due to rising incomes, lagging infrastructure and agricultural practices.

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REEFER SHIP

A reefer ship is a refrigerated cargo ship; a type of ship typically used to transport perishable commodities which require temperature-controlled transportation, such as fruit, meat, fish, vegetables, dairy products and other foods.

LABOR DISPUTES

Labor disputes frequently bring intermodal shipping to a halt. In early 2015, dockworkers practically shut down nearly 30 ports along the West Coast of the United States, leaving dozens of cargo ships stranded all up and down the seaboard. This didn’t only mean that goods, including perishable foods, were floating offshore: It also meant that U.S.-grown food was rotting while waiting to be picked up.

The 2015 dockworker labor dispute forced a backlog of trucks at the Port of Los Angeles, where hundreds of trucks and dozens of cargo ships waiting to pick up and unload freight. This port, along with the port in Long Beach, handle more than 40 percent of goods entering the U.S. and almost 30 percent of its exports. Images by Mike Kelley.

EXPANDING A TASTE FOR GLOBAL FOOD

Expanding the canal will shift where ships dock, but it won’t shift our palate or our consumption levels, experts say. America has plenty of food. We import food because we like variety and we demand it all year. Not long ago, finding a fresh pineapple during a Minnesota winter would have been a miracle, but now, you can find plenty of them on produce shelves just about every day of the year.

The expanded canals will increase this kind of globalized eating in other places in the world. Asia’s consumption habits, for instance, have changed tremendously in the past 20 years, with per capita consumption of rice decreasing and consumption of wheat, protein and convenience food and drinks on the rise.

In building the interstate to unify the country, we created immense opportunities for trade while implicitly encouraging product standardization and the dissolution of regional mainstays. Ten general stores have given way to one central Walmart. States have become known for farming only one or two commodities. The same gas station burritos are sold along all 2,460 miles of I-10. These things aren’t inherently bad — except for the burritos — but they represent a shift in cultural values made possible by expanding infrastructure.

We’ve seen the interstate system revolutionize how we grow and transport food. We’ve seen reefers, shipping containers, ports and canals guarantee a consistent supply of produce from tropical countries. Alternatively, we’ve seen the food we have grown and the diet we created packaged up and exported to other countries through those very same channels.

Time will tell exactly what happens after the third locks — and maybe the fourth — open in the Panama Canal, and whether the Chinese-built Nicaraguan Canal, if completed, will turn everything that we know about canal economics on its head.

The Panama Canal expansion won’t show up on the average American consumer’s grocery receipt. The cost savings will be eaten up by shipping companies, and though your mango may arrive a day earlier, you won’t know it. That’s the way it’s supposed to be, but with our growing interest in food and where it comes from, maybe we’ll demand more transparency from a system that thrives on invisibility.

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Meltdown, Roman Style

Meltdown, Roman Style

by | Jan 3, 2016 | Feature, Issue 1, Stories

Licking a naturally made gelato in the heavily trafficked city of Rome only takes a few euros. But for its producers, making and moving gelato around Rome is nothing short of miraculous.

Penelope Cruz and her daughter were in Rome last May, and like everyone who visits Italy’s capital city, they wanted gelato.

So they turned to the guy who knows it best, Nazzareno Giolitti, president of the always-buzzing Giolitti gelato shop just steps away from the Pantheon.

Giolitti sat at one of his shop’s coveted outdoor tables, his black polo shirt, white hair and royal blue glasses perfectly matching his blue and black Lucky Strike box. Between sips of espresso and the occasional interruption from his telefonino, Giolitti boasted again and again about the statesmen and actors who visit his shop. Impressive, yes. But he was far less interested in discussing the quotidian set of miracles accomplished by his vast network of purveyors, deliverymen and chefs as they create homemade gelati for more than 2,000 customers a day.

“Rome is a chaotic city. It’s also the most beautiful city, so we pretend not to notice the problems,” he said.

Outdoor seating at Gelateria Giolitti on Rome’s Via Uffici del Vicario near the Pantheon.

Giolitti’s family started selling gelato in 1906 and opened this location on Via Uffici del Vicario in 1930, making it the oldest Roman gelato shop still in operation. The gregarious fourth-generation gelataio grew up in this elegant cafe, with its high ceilings and white-clad waiters, all of which feel a bit too serious for its clientele.

“It’s difficult,” said Giolitti on running a gelateria in a city with strict traffic regulations and regular strikes and protests. Driving is a real challenge. “But for those born into the chaos, it’s less difficult,” Giolitti explained.

Because Giolitti sells so much product, he receives daily deliveries of milk and eggs from trucks that double-park outside his shop. For the most part, these shipments arrive without a hitch. But when there are impenetrable strikes or heavy traffic, Giolitti gets the call from a frustrated deliveryman. That’s when he sends his motorino out to pick up the product himself.

Once a week, Giolitti drives 30 minutes northeast of Rome’s city center to buy fresh fruit and spices at the Centro Agroalimentare Roma (C.A.R.), the largest wholesale market in Italy and the fourth largest in Europe. The massive 346-acre market in Giudonia looks more like an airport than a place to buy fresh produce.

Each morning, seven of Giolitti’s employees use these ingredients to produce roughly 800 kilos of gelato a day. Most of the gelato is consumed at the shop, but Giolitti also delivers gelato to select restaurants and, if he needs a favor, friends in high places. To transport it, he uses furgoni, or vans sized to maneuver the tight streets of Rome better than the average truck.

“Parking tickets are always a problem,” said Giolitti, “but they are part of the job.” He’s able to keep these 70-euro violations to a minimum thanks to an annual 1,500-euro pass that enables him to move around the city center.

When important statesmen come to town, local officials try to close down Via Uffici del Vicario. Giolitti has to remind them that tourists come from all over the world to visit his shop. They expect it to be open. “So we offer the vigili (traffic police) free gelato,” he said with a smirk.

Giolitti compares Rome’s gelato industry to the tale of its rougher neighbor, Naples: “So many people conquered it and then left,” he said. “The ones left behind, they’re the strongest.”

Giolitti’s old-school approach of selecting produce at the C.A.R. and having milk and eggs delivered daily is too much trouble for the majority of gelato shops in congested Rome. Instead, they spin gelato on site using pre-mixed powders, which can be bought in bulk and have a long shelf life. This also means never having to turn customers away because an ingredient didn’t arrive on time.

“Before the war, gelato was a special treat — you needed access to a cow and you needed really expensive ingredients like sugar, fruit, nuts and chocolate,” said Elizabeth Minchilli, an American expat-turned-Roman food expert who leads food tours around the city. “Once these machines and products were designed, it enabled everyone to make ice cream with the push of a button.”

Minchilli sipped a Negroni and nibbled on peanuts at a trendy bar near her Monti home. The intense, auburn-haired St. Louis native met her Italian husband in her early 20s and settled here, where they raised their two now-grown daughters.

Most of the fruit used in Giolitti’s gelato comes from one of the 85 wholesale produce vendors at the 13-year-old Centro Agroalimentare (C.A.R.), a 346-acre market just outside of Rome that is the largest wholesale market in Italy and the fourth largest in Europe.

Rome’s food system depends on small, nimble methods of transportation, from the furgone truck to the three-wheeled ape and the ubiquitous motorino. Piaggio’s popular Vespa (which means wasp in Italian) is a popular motorino brand.

She explained that a major challenge for Roman businesses is the zona a traffico limitato (ZTL). Rome’s is the largest traffic limitation zone in Europe, meant to keep the historic sites free of pollutants, to encourage public transportation and to reduce traffic.

For the most part, general traffic is restricted from the city center between 6 a.m. and 6 p.m., which causes a rush just before and after, and makes on-time truck deliveries difficult.

But it’s not only the traffic, explained Minchilli. The mayor of Rome is trying to clean up government corruption, but in doing so he’s instigated a “white strike,” where employees do the minimum work required by their contracts.

This means potholes in the roads aren’t being fixed, and if you go to an office to contest a parking ticket, no one is there to help you. “The bureaucracy makes things hard,” said Minchilli.

It’s no surprise, then, that roughly 90 percent of gelato makers are eschewing tradition by using commercially made powdered bases in those push-button machines.

But, as long as that machine is on site, Minchilli said, the gelateria can call itself “artisanal.” This makes it difficult for consumers to know that they’re really eating processed powders.

When a varco sign is active, only residents or vehicles with special permits can enter Rome’s limited traffic zone.

Gelati made from powders are often overly bright in color. Impressive to look at, but, many argue, not as good as fresh gelato made from whole ingredients.

Overcoming delivery and distribution hurdles while still making ice cream from top-notch ingredients is what prompted Maria Agnese Spagnulo to start her unconventional gelato company, Fatamorgana, 12 years ago.

Maria and her husband, Francesco Simon, realized that in order to use the quality of ingredients they wanted while still selling gelato at a fair price, they needed to create their own economy of scale.

Unlike Giolitti’s traditional model, Spagnulo makes all of the gelato for her seven stores at a commercial kitchen in Trigoria, which is southwest of Rome’s city center and just outside the Grande Raccordo Anulare (GRA), or the “Great Ring Junction,” a 42-mile toll-free highway that encircles Rome.

Spagnulo set up her workspace outside the GRA so that she could easily access her stores within Rome. When you’re within the city, it’s harder to get from point A to point B. But when you can move around the GRA and enter at different points, it’s a lot faster, she explained.

Faster, sure, but this sensible method of distributing one of the freshest gelato products in the city does not qualify as “artisanal” like those powdered packets mixed on site, explained her fast-talking husband.

What customers might not know is just how obsessed Spagnulo is with ingredients. Her gelato base contains only milk, cream, sugar and flavors that come from whole ingredients such as saffron, hibiscus flower and lapsang souchong tea, to name a few. She uses these components to make some unexpected flavors such as Sorrento walnuts with rose petals and violet flowers or chocolate gelato with Kentucky tobacco leaves.

Every day, Fatamorgana’s main kitchen receives a milk delivery from Parmalat, one of the country’s largest dairy companies. For fruits and vegetables, Spagnulo goes to farmers’ markets three times a week to meet with producers. Sometimes she’ll schedule a delivery; other times she’ll carry them back in the company furgone.

For some ingredients, like the prized Bronte pistachios, she orders in bulk directly from a Sicilian farmer. Simon explained, “if the pistachios from Bronte don’t arrive, guess what, we don’t have pistachio gelato that day, and our clients understand that.”

Every day, Spagnulo makes just enough gelato to fill the cases of all seven ice cream shops. At the crack of dawn, two furgone, each fitted with a -22° Fahrenheit freezer cabin, deliver gelato.

The Fatamorgana founders, Maria Agnese Spagnulo and Francesco Simon, in their offices and teaching studio near Rome’s Villa Borghese.

The orange area in the center of the map at left indicates Rome’s ZTL, or traffic limitation zone. Unless you have a special ZTL pass or are a resident you cannot enter this area of the city at certain times, which makes it difficult to deliver goods to shops, markets and stores of all kinds. The green cone is Giolitti. The red cones are Fatamorgana. The orange cones are Grom.

Simon explained that even with a pass to enter the ZTL, delivering gelato to the shops is fraught with challenges. “Before six in the morning, it’s pretty reasonable to get things around Rome,” said Simon. But by the eight o’clock rush hour, “it’s a mess, and from eight-thirty to ten, it’s a disaster.”

A few of their stores are located near 30-minute loading and unloading zones. “But when those are not available, we double park in true Roman style,” Simon said with a smile.

This mid-sized gelateria figured out a profitable model that allowed them to open several stores throughout Rome — so successful they’re discussing the idea of expanding to the U.S.

A gelateria that faces similar challenges to Fatamorgana, but on a much larger scale, is Grom, which has 55 stores in Italy, seven of which are in Rome. Despite their size difference, both companies are reinterpreting how natural gelato can be made, distributed and marketed.

Grom’s liquid gelato bases are all mixed in their Turin production facility from fresh ingredients — high-quality whole milk, as well as free-range egg yolks and many fruits from their own organic farm, Mura Mura, about one hour southeast of Turin in Costigliole d’Asti.

These bases are then frozen and shipped weekly in freezer trucks to their numerous locales. Once the gelato bases arrive at the shop, they are thawed and immediately spun into a rainbow of frozen confections that greet customers by 11 every morning.

Farmer-gelato maker Giudo Martinetti and CEO Federico Grom have grown their business from 19 stores in 2007 to 62 in 2015, including outposts in Dubai, Osaka, Jakarta, Paris, Los Angeles, Malibu and New York.

As a result, some of their products have changed to meet the demands of such expansion. When they first opened in 2003, they sourced the famous whole pistachios from Bronte that Spagnulo uses. They’ve since switched to using Tonda Gentile pistachio paste and pistachio flour. Their success, however, has allowed them to launch an organic farm and a bakery that makes homemade cones, a rarity even among the best gelato shops. To get a sense of how this new gelato model works, I squeezed into the company ape (pronounced AH-pay) next to Daniele Piva, a bearded, 20-something salesman.

Ape means “bee” in Italian and refers to the three-wheeled miniature trucks (about the size of a Smart car) that shuttle all kinds of products around the city. Like motorini, apes don’t need permits to pass in and out of the ZTL, which is one of the main reasons that companies like Grom use them to move supplies. Our job was to deliver dry goods like napkins, spoons and cups to the company’s three heavily trafficked stores at the Pantheon, Piazza Navona and Campo dei Fiori.

This was my first ride in an ape, which handles the road more like a Vespa (a moped that means “wasp” in Italian) than a car. We rolled over the uneven cobblestones, dodging the occasional divot in the road and frequent tourist. Motorini and pint-sized cars whizzed past us as we puttered around the twisty roads, crouched in a tiny truck, feeling only somewhat protected from the madness on the streets by thin doors and windows. “You have to have courage to drive in Rome,” explained Piva as I cringed.

Then traffic slowed and brought us to a sudden halt. “In the center of town, the biggest problem is driving around the tourists,” explained Piva, as a group crossed in front of us. Political manifestations and transit strikes usually don’t last for more than a day or two, but they can feel as prevalent as the tourists. “When they happen, you learn to be patient,” Piva said. Unilever, the third-largest consumer goods company, bought Grom last fall, just months after picking up the U.S.-based Talenti. How Grom’s production methods will change under the new ownership is still unclear.

FATAMORGANA DELIVERY ROUTES

The ring road around downtown Rome, called the GRA, helps Fatamorgana deliver gelato most efficiently to its seven stores throughout the city. This map shows the routes their furgone use from their commercial kitchen in Trigoria to their Roman shops and back again. Route #1 (in light green) departs Trigoria Kitchen (a.m.). Route #2 (in blue) returns to Trigoria Kitchen. Route #3 (in green) departs Trigoria Kitchen (p.m.). Route #4 (in magenta) returns to Trigoria Kitchen. Zona a Trafficato Limitato (in orange).

Grom founders, Federico Grom (left) and Guido Martinetti, launched their first store in 2003 with a model that allowed them to control their gelato product but expand exponentially. They just sold their company to Unilever for an undisclosed sum.

Biolà’s grass-fed Jersey cows produce milk, 70 percent of which goes to other dairy companies that bottle and sell it. The remaining milk is sold directly to customers or is made into value-added products.

If Grom and Fatamorgana are trying to make oldschool gelato in a new way, Biolà owner Giuseppe Brandizzi is taking that idea even further.

Brandizzi’s gelato starts at his family’s organic, raw cows’ milk dairy farm just 30 minutes west of Rome, which his grandfather started in 1954 and his father later ran. Today, the third-generation Brandizzi, who considers himself the custodian of his father and grandfather’s philosophies, now runs the farm and Biolà brand.

Over the years and due to its small production, Biolà expanded beyond just milk to sell more value-added products like cheese, yogurt, beef and gelato. Brandizzi only began making gelato a year ago and is hoping to increase production in the coming years due to its popularity and profitability. He can sell a pint for 9 euros.

Biolà differentiates itself further from other gelato companies by selling its products directly to consumers from a mobile freezer-furgone at designated times and locations throughout the week, mostly in Rome’s peripheries. This model was Brandizzi’s creative solution to the Italian law that forbids unpasteurized milk to be sold through a third party.

Unlike his competitors, however, Brandizzi deals with the challenges of raising livestock, producing milk and gelato, and selling the end products. Wearing a plaid shirt and Panama vest with cigarette in hand, Brandizzi walked past his 60 Jersey cows that are the heart of this intentionally small-scale operation. “Cows that are forced to make a lot of milk actually make less,” he explained. “They are stressed and have a shorter lifespan.”

Biolà produces only 500,000 liters of milk annually, which is a small amount compared to the 10 million liters that the nearby Maccarese dairy produces each year. Of that 500,000, 70 percent goes to other milk companies that bottle and sell it. The remaining 30 percent goes into their direct sales of milk and those value-added products.

Anywhere from one to three furgoni drive to various locations each day, making about three to four stops and parking in a locale for a few hours at a time.

Gerardo Della Vecchia, a jovial, rotund man in his 70s who has been working for Brandizzi for 10 years, parked his Biolà van along the busy Via Gianicolense in the Monteverde district just southwest of the city center.

Della Vecchia set his credit card machine on a small wooden table that hung over the passenger side door and opened the truck’s sliding door to reveal the milk dispenser — a mini door that led to the truck’s refrigerator unit. The sign above the dispenser said the milk had been milked at 4 a.m. that morning and should be consumed in just three days.

By 4:30 p.m. the first motorino pulled up. Helmut on, the driver yanked an empty bottle from his miniature trunk and handed it to Della Vecchia, who filled it with fresh milk. Most of his clients knew him by name. “I watched this kid grow up,” he said, after a teenage boy turned to leave with a bottle of milk.

A young woman, who looked as though she had just come from the beach, bought a small cup of hazelnut gelato. It was clear that Della Vecchia had a good rapport with the nearby café, whose owner came out to chat. But for some Biolà salesmen this isn’t always the case. “Sometimes nearby shop owners call the police, and tell us to move on,” Brandizzi said. But when the municipal police arrive to ticket, that’s when he gifts them some fresh ricotta or gelato.

Brandizzi may not serve his gelato to movie stars or heads of state, but as he talked about currying favor with local officials, he wore a smirk similar to Giolitti’s when he described how he makes Rome’s complicated, often messy and maddening, food system work for him. Call it what you will — these little miracles make the world, and gelato biz, run.

Gerardo Dalla Vecchia, a longtime salesman at Biolà, fills a bottle with milk from his refrigerated furgone.

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